How to overcome common payment overdue challengesBack
21 Sep 2020, 14:01 — 4 min read
It is estimated that over 80% of businesses shutting down are due to cash flow problems. And a leading cause for cash flow issues is unpaid dues. Late payment can thus hurt the growth of a business and in some cases, threaten its very existence. Consequently, collecting payment overdue is a time-consuming and painstaking task for businesses.
Common reasons for overdue payments
Some of the reasons cited for delay in payment or non-payment of dues are:
- The supplier/ customer becomes insolvent and therefore can’t pay dues
- Business does not have time to chase the debt owed
- Business does not have funds to chase debtors in court
- Business does not want to damage a future relationship with supplier/ customer by demanding the debt owed
- Business does not know how to go about reclaiming dues
Here are some tips to overcome payment overdue challenges.
Do your research
Before accepting a new customer, check the client’s payment history to ensure they have a reputation for paying on time.
Agree on timely payment terms
Get customers to sign a standardised contract that specifies payment terms. This contract must clearly state when a customer must pay your invoice and the penalty for overdue payments. Include these payment terms on every invoice.
Send invoices on time
Make sure you send out your invoices promptly. Ensure that the details are correct to avoid delays.
Also read: GST Fundamentals: Doing the invoices right
Offer a range of payment options
Make it easy for customers to pay you by offering them various payment options such as Bank UPI, mobile wallets, debit/ credit card. If your clients are based in another country, accept payment in their currency.
Managing customers efficiently
With numerous customers, it is vital to identify ways to effectively manage these users by keeping track of customer payments. A reliable payment solution is necessary to help categorise customers in terms of their payment cycle and dues. An effective software helps you to track and record customers from the moment they sign up with you.
Automate overdue payments
Tracking overdue payments can be challenging when you have hundreds of customers. This scenario becomes even more complex if you offer different grades of service. To solve this problem, use an invoice tracker system. This way, you’ll receive an alert when invoices are overdue.
The art of following up politely leveraging technology
A large customer base can make handling customer communication and message challenging. Your automated tracker system should have the in-built capability to identify customers with overdue payments and send appropriate messages.
Don’t give up
If you have overdue invoices, then make sure you follow through and charge them. A smart technology solution can help MSMEs and other businesses collect customer dues faster and reduce risk before offering service, credit or a loan.
Business owners need to identify a payment tracker solution that deals with their issues in a simple and cost-effective way. Make sure this automated system provides an integrated solution for collecting customer dues smartly and efficiently.
Image source: shutterstock.com
Posted byGlobalLinker Staff
We are a team of experienced industry professionals committed to sharing our knowledge and skills with small & medium enterprises.
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